Quo vadis, Sugar?

  • 23rd April 2020
  • 2020
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Is there a future for the sugar industry under the Bainimarama government? How much longer before the eventual collapse?

These are the oft-asked questions bothering those who have been witnessing the slow but sure strangulation of this once premier industry.

A quick look at the industry KPI’s pre and post the Bainimarama era should provide answers to these questions – the figures are from FSC Annual Reports 2007 and 2009:

Year Cane (tonnes) Sugar (tonnes) TCTS Active Growers Area Harvested FSC profit/(loss)
 

2007

 

 3.23m

 

310,000

 

10.0

 

15,370

 

55,438 ha

 

$7m

 

2019

 

1.70m

 

160,000

 

10.6

 

11.902

 

37,105ha

 

($80m)

In 2007, FSC had a loans portfolio of $50m against which it had Reserves and Retained Earnings totalling $154m.

By 2019, the loans portfolio had escalated to $412m, the Reserves had been wiped out, and replaced by accumulated losses of $344m.

The average crushing rate of the mills in 2007 was 919 tonnes per hour.

In 2019 it had declined to 674 tonnes per hour.

Again in 2007, the mills were crushing for 76% of the available time. This had dropped to 63% in 2019, despite millions spent on refurbishing and upgrading.

The comparative figures  are conclusive enough and must be taken seriously by all the industry partners.

Although the standing of sugar as a revenue earner may have dropped from numero one to third or fourth down the line, its socio-economic impact still remains quite significant.

Close to 150,000 people are directly or indirectly still dependent on the industry for their livelihood. The farming community in districts like Ba, Macuata and Ra remain heavily reliant on cane for their economic well-being. To some extent, so is the rural community in the Lautoka, Nadi and Sigatoka areas.

Likewise, towns such as Ba, Tavua, Ra and Labasa that grew up as service centres for their cane farming community, continue to rely heavily on income from cane proceeds for their sustenance.

Should the sugar industry collapse in the near future, its socio-economic impact would be colossal. Regrettably, we seem to be heading that way under the Bainimarama government.

But then how long can the State and the taxpayers continue to pump scarce funds into an industry that is failing to perform to expectations?

A collapse is imminent because government finances are in no shape to continue subsidizing it for too long. Start of the crush for the 2020 season remains uncertain with the disruptions brought about by the COVID-19 pandemic.

Any responsible government would have by now laid open its rescue plan for the industry stakeholders whose livelihoods are exposed as a result of the ominous developments surrounding the industry. But not so the Fiji First!

It is high time for cane growers organisations, landowners and FSC workers’ unions to come together to confront the government to reveal the truth about the industry’s future.